Schneiderman announces nearly $5 million settlement with National Grid for failing to pay full wages to workers after Hurricane Sandy

by jmaloni

Submitted

Thu, Sep 26th 2013 04:30 pm

Schneiderman:
Workers must be paid their wages on time, even after a natural disaster when
they need cash for home repairs and other necessities

Attorney
General Eric T. Schneiderman has announced the resolution of an investigation
into employee complaints that National Grid, the multi-state electric and gas
utility company, failed to properly pay its New York workers as required under
state and federal law in the months after Hurricane Sandy. In addition to
repaying previously unpaid wages, which has already largely occurred, the
attorney general's agreement requires National Grid to pay another $750 to
every hourly employee who worked for the company between Nov. 1, 2012, and
March 31, 2013. The total in additional monies, going to 6,500 workers, is more
than $4.8 million.

"Some
of the affected employees in this case reported that they were unable to repair
their own homes after the storm because of National Grid's underpayments,"
Schneiderman said. "National Grid's workers will receive some compensation - and
an explanation - for the financial hardship they endured in the aftermath of
the storm."

The
agreement with the attorney general's labor bureau requires National Grid to
provide an accounting to employees summarizing unpaid and underpaid wages, and
to explain the date and manner in which payment problems - which the company
attributes to computer glitches - have been fixed. In addition, the agreement
requires National Grid to provide the attorney general's office with a report
summarizing causes of systemic payroll failures, a description of steps taken
to remedy the problems, a summary of lessons learned, and a description of
measures National Grid will take to prevent any future recurrence.

National
Grid provides energy to business and residential customers in large parts of
New York state, including Northern and Western New York and on Long Island.
National Grid, headquartered in Massachusetts, employs more than 10,000 people
in New York.

More
than 6,500 hourly employees who worked for National Grid in New York ("New
York employees") did not receive their full pay on time. During a period
of 19 weeks, there were approximately 32,000 incidents in which employees were
underpaid and provided with inaccurate wage statements.

National
Grid's failure to properly pay employees, from Long Island to Syracuse, was the
result of the company's conversion to a new computer system, which involved
changes to its time-keeping and payroll systems. The new system was scheduled
to "go live" on Nov. 5, 2012. Despite the forecasts of a hurricane headed for
the East Coast, National Grid failed to delay this company-wide computer
conversion. This caused massive disruption to National Grid's pay and
timekeeping system, including nonpayment of wages, nonpayment of overtime and
inaccurate wage statements to employees. In addition, the attorney general's
office found that, for more than a month after this disruption, the staffing
resources devoted to fixing the system remained insufficient.

After
Sandy hit the New York area, National Grid employees worked greatly expanded
hours. Many workers were underpaid or not paid at all. They experienced
disruptions in direct bank deposits of their wages. Among other problems,
certain established payroll deductions did not take place for some, resulting
in employees defaulting on child support garnishments and other legal
obligations.

The
non-payment and underpayment of earned wages had serious consequences for many
National Grid employees, some of whom reported to the attorney general they
were left unable to pay rent, repair their homes and pay for other basic
necessities. This failure to pay all wages owed in a timely manner caused
significant stress, confusion and anxiety to employees, many of whom worked
extremely long hours in the weeks after the storm, repairing damage caused by
Sandy, in an effort to restore service to National Grid customers.

In
addition to the OAG investigation, four private lawsuits concerning the
underpayments were filed in New York. Any funds paid toward settlement of those
lawsuits will be credited toward National Grid's obligations under the attorney
general's settlement.

In
the course of the investigation, the attorney general's office collaborated
with the Massachusetts attorney general's office, which announced a similar
settlement with National Grid today.

Under
New York law, employers are required to pay manual laborers at least weekly and
to pay clerical and other covered workers in accordance with agreed terms of
employment and at least semi-monthly. Employers must also pay employees at
least the minimum wage, currently $7.25 per hour, and must pay overtime at time
and one half of employees' regular hourly rate for all covered workers.
Employers must maintain payroll records, including hours and actual pay, and
furnish to each employee a statement with every payment of wages, listing hours
worked, rates paid, gross wages and allowances, if any, claimed as part of the
minimum or promised wages.

Donald
J. Daley Jr., business manager of IBEW Local Union 1049 on Long Island, said,
"Our hardworking members deserved to be paid correctly and on time. For
National Grid to implement a new payroll system during the Hurricane Sandy
restoration was highly irresponsible. I want to personally thank New York State
Attorney General Eric Schneiderman (for) his close attention to this matter and
bringing it to fair resolution."

Theodore
Skerpon, president and business manager of the Upstate IBEW Local 97,
said, "On behalf of the 3,200 National Grid employees that are represented by
IBEW Local 97, I would like to thank the New York State Attorney General
Schneiderman's office for bringing this resolution to the recent debacle
created by National Grid regarding the implementation of a new payroll system.
I applaud the fact that the attorney general's office did not take the easy route
by just issuing a fine and 'slapping the hands' of the company. Instead, they
held the company liable for their actions by requiring them to provide a root
cause, create steps to remedy the problem and take measures to prevent further issues.
It is evident that the attorney general is truly concerned about the well-being
of the people of New York state."

New
York City TWU Local 101 President Michael Conigliaro said, "We at TWU Local 101
are satisfied with the results of the settlement on behalf my membership. We
have waited a long time for our (members) to receive what they deserve."

The
case was handled by Assistant Attorney General Kevin M. Lynch and Labor Bureau
Special Counsel Patricia Kakalec, under the supervision of Bureau Chief Terri
Gerstein, Executive Deputy Attorney General for Social Justice Alvin Bragg, and
First Deputy Attorney General for Affirmative Litigation Janet Sabel.